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Trust - The Must Have for the 21st Century Leader

24/10/2014 15:53 BST | Updated 24/12/2014 10:59 GMT

Trust means many things to many people which can make it quite a somewhat undefinable and vague subject. So what exactly is it? Why does it matter in a business context? And what does it look like in your organisation?

We give our trust every day of our lives. We trust drivers to keep to the rules of the road, water companies to ensure our water is clean and arrives to our houses, schools to nurture and protect our children and mail services to deliver what we post. Trust is a fundamental feature of human life and society and that means it is also a fundamental feature of all organisations.

So we know that trust is a facet of our everyday lives but why should business leaders be making it a priority in the workplace? The answer is that there is an important connection between trust and organisational resilience and it is ignored at your peril. High trust enables organisations to respond, adapt and react quickly and effectively to the unprecedented levels of unplanned change that we have seen affect every sector in the past decade, from the recession through to the technological revolution.

Rapid changes in technology, employment legislation and the increasingly complex demands of employees and customers are just some of the issues that businesses will continue to grapple with in the coming years and organisations with high levels of trust are far more able to be agile and respond to these changes effectively, and indeed use them to their best advantage.

In business terms there are two broad categories of trust that leaders should consider. These are internal and external trust. I will begin with the element which most profoundly affects the other. Internal trust. Put simply this is the trust between the people within your organisation. Trust in leaders by those being led, trust leaders have in those they lead and trust between team members in the same team or group.

Having high levels of internal trust is essential for leaders in the 21st century. The days of the leader being the source of all answers are long gone and a leader's job is now to entice the best out of people and teams to ensure success. This requires significant trust on both sides. Trust on the behalf of the manager that his team are capable to come up with the solutions and get the job done and trust on the behalf of the employees that they will receive the encouragement, support and guidance they need to succeed. Additionally, trust between team members should be nurtured and encouraged as the highest performing teams almost always have the highest levels of trust in one another and will work together effectively towards a common goal.

Another significant benefit of high trust is that it helps to cut costs and increase revenues by making organisations more streamlined and efficient and increasing productivity. In high trust environments a team will willing follow a leader negating the need for so many costly checks and balances, speeding up processes and creating an environment where innovation is able to flourish.

Equally important for the success of an organisation is external trust. This means the relationship between an organisation and its employees and the people and organisations outside of it, including customers, suppliers, future employees and the market in which you do business. Developing high external trust, particularly with your customers, can play a vital role in the future success of your business.

So as a leader how do you know how trusted your organisation is? And what can you do to increase trust? As I mentioned previously internal trust has a profound effect on external trust, therefore high trust starts at home. Organisations should seek to benchmark the levels of trust they enjoy within their own organisation to find out where they are doing well and to enable then to put steps in place to improve areas where necessary.

High levels of trust inside your organisation will then radiate outwards. Your staff are, after all, your ambassadors. If trust is low within your business then your customers will be the first to see it, as disaffected employees with low levels of trust will often deliver poor service and speak badly about your organisation. Happy staff with high levels of trust will gladly follow leaders and work with each other to achieve common goals giving your customers the very best experience.

Realising the significant impact of trust on organisational effectiveness ILM developed the Index of Leadership Trust in 2009. This enables organisations to look at the levels of trust that employees have for their leaders and benchmark organisations against their peeps giving an insight into how trust can be improved and ensuring that generating trust is at the top of the agenda.

Placing trust at the centre of your approach to leadership and understanding what a powerful force it is will allow you to steer your organisation to success and to avert disaster. Leaders in the 21st century will have to be agile, be adaptive, have to think and respond quickly to totally new challenges but, above all, they are going to need to trust, trust their teams, trust those who supply them and supply those they trust. Prioritising trust won't guarantee you success but it will make it much more likely.

This article has been produced using extracts from a chapter Charles Elvin wrote for the book 'Developing Resilient Organisations.'

Notes:

The Institute of Leadership & Management (ILM) is Europe's leading management organisation. We believe that good leadership and management holds the key to organisational effectiveness and social and economic prosperity. Our fast-growing community of over 35,000 practising leaders and managers gives us a real insight into the issues affecting the management community day-to-day, both in the UK and globally.

Each year we help over 92,000 practising and aspiring managers to fulfil their potential and achieve success through a range of flexible leadership and management development solutions. Backed by an in-depth programme of research, ILM operates internationally, improving leadership and management skills, across all sectors, from financial services to the armed forces.

Institute of Leadership & Management (ILM) www.i-l-m.com

Trustrack

In early 2015 ILM will be releasing a brand new tool to track trust in your organisation called Trustrack. It looks at the 6 fundamental areas of trust (proven by numerous academics). Ability, understanding, fairness, openness, integrity and consistency. This tool will enable organisations to compare departments to one another as well as to compare companies to each other.